EU says cost of sending text messages must fall

16th July 2008, Comments 0 comments

The EU telecoms chief is calling for a cap on the roaming fees for text messages and will put forward rules in October.

16 July 2008

BRUSSELS - Mobile phone operators are ripping off text-messaging teens, the EU telecoms chief said Tuesday as she called for a cap on the price of texting abroad.

EU Telecoms Commissioner Viviane Reding said she wanted to see roaming fees for text messages fall by up to 70 percent and will put forward rules in October to cap charges.

She also warned that the EU may take action on "heavily overpriced" mobile Internet fees if companies don't do more to slash these in the next few months.

Europeans travelling outside their home nation send some 2.5 billion text messages every year - paying 10 times more than they do at home.

Reding said some 97 percent of the price of each message is "pure revenue for the operator" wrung out of the three-quarters of young people who text when abroad.

"We are punishing our young students, our young travellers, and that is completely unfair," she said, claiming operators have ignored her call to curb costs by 1 July.

Sending a text abroad costs EUR 0.29 on average across the EU - but that can climb to EUR 0.80 for Belgian customers.

Telecoms regulators from the EU's 27 nations want to see that fall to between EUR 0.11 and EUR 0.15 for each message.

Reding said she wanted to see prices at the lower end of that scale - and eventually see the cost fall to around EUR 0.04 per text.

Her attack on text messages comes just a year after the EU capped the costs of voice calls made and received abroad. Costs for calls have dropped by up to 60 percent since last summer.

The European Commission said a new Web site listing roaming charges showed wide differences in what people are charged across Europe. A Swedish tourist in Spain would pay up to EUR 0.40 (US$0.63) to text home while a British friend could be charged as EUR 0.63.

Reding was more cautious about taking action on data services which charge BlackBerry or 3G phone users per megabyte, or MB.

Prices for using mobile Internet from abroad range widely from EUR 0.25 per MB to over EUR 16 per MB, the EU said.

She said she'd like to see charges in the long-term drop to around EUR 1.18 per MB, as Denmark's telecoms agency suggests.

Regulators warned that many customers see "bill-shocks" because they don't know how much they are being charged - in worst-case scenarios, paying thousands of euros for a few days' use - and this may stop businesses from using mobile Internet.

They criticised the rates mobile operators charge each other to transfer data, saying high wholesale rates prevent smaller operators offering cheaper services.

One of these smaller players - 3 Group - said EU rules were needed to bring down wholesale rates and unlock the market. Christian Salbaing, 3 Group's European managing director, said only five of 100 networks had agreed to a reciprocal wholesale rate of EUR 0.25 per MB.

Telecoms companies said Tuesday they are already bringing down prices gradually as more people use data roaming services - and argue this is a new market where regulation would be a bad idea.
Tom Phillips, the GSM Association's chief government affairs officer, said the EU price cap "threatens to choke growth and stifle competition".

The group - which represents 750 mobile phone operators worldwide - said text messaging abroad has declined 18 percent in the EU over the past year. Regulators claim it hasn't budged in recent months.

Telefonica's O2 says it has reduced data roaming prices by more than 40 percent since April, Vodafone says it has cut the price per megabyte by 45 percent, and France Telecom's Orange promises it will soon offer cuts of up to 90 percent on standard data roaming prices.

Mobile Internet use has been expanding in recent months, phone companies say, but the draw isn't pricing - it's the rollout of social networking sites like Facebook and gadgets like Apple Inc.'s iPhone.

[AP / Expatica]

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